From a press release:
City representatives and elected officials announced the introduction of State enabling legislation that will allow the City of Providence to partner with municipal water supply systems or regional water quality management district commissions in an effort to ensure long term rate and quality stability of the city and state’s greatest asset, the Providence water supply.
“For more than 100 years, Rhode Islanders have relied on Providence to be the stewards of most of the state’s water supply,” said Mayor Jorge Elorza. “It’s time for us to protect our asset and continue to modernize our system. We can no longer kick the can down the road. This legislation is critically important to maintain a vibrant and optimistic future for our state, preserve the quality and affordability of the water source and to address our long term finances. We’ve explored many options and if we do not take action now we may not be able to later on.”
The legislation authorizes the City to enter into a partnership with other water authorities, operators, or regional water quality management district commissions while stabilizing rates and preserving public oversight of the utility. The bill will be introduced this week in both the Rhode Island House of Representatives and the Rhode Island State Senate.
“This legislation is a result of serious deliberation of our future,” said Senator Maryellen Goodwin (Democrat, District 1, Providence). “As goes Providence, so goes the Rhode Island. That’s why we’re proposing a collaborative approach that will safeguard reliable, low-cost and high-quality water while providing the capital city an opportunity to address its pension obligation once and for all.”
Providence Water is the leading water supplier in Rhode Island, serving 60 percent of state residents. There is consensus among leaders that the City of Providence cannot continue to provide and pay for the water supply that serves over 600,000 customers. Should proactive steps not be taken to stabilize the City’s long-term finances, the system would likely be among the first assets at risk with insolvency. The proposed legislation would enable the City to continue to put itself on solid financial ground by protecting this asset and using the expertise of partners to position Providence Water on a more sustainable path, ensuring reliability and high quality service.
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“What we’re proposing with this legislation is in the best interest of the entire state,” said State Representative Scott Slater (Democrat, District 10, Providence). “It’s unsustainable for Providence to continue to operate, and pay for, the water system that serves the majority of Rhode Islanders. This is an opportunity to make sure that decision-making for our water supply remains at the local level for years to come and to puts Providence on a sustainable financial path.”
Rate increases will be capped for the first five years following any transaction and any rate increases will not exceed already approved percentage rates for five years prior to any transaction. Recently, rates were increased by 8 percent in 2017 while remaining much lower than the rates of most regulated water utilities in the state.
Upon completion of any transaction, the resulting entity will be a fully-regulated public utility with continued oversight and regulation to protect the water quality of the system and ensure a sustainable future of this precious resource. Any and all revenue would be applied to the City’s pension fund.
The City is also inviting residents from across Rhode Island to participate in community conversations hosted by the Mayor’s Office and partners focused on the legislation and its potential impact statewide. Community meetings are set to take place on the following dates, times and locations:
- March 4, 2019, 6:00PM – 7:30PM; Nathan Bishop Middle School, Auditorium, 101 Sessions St, Providence, RI 02906
- March 11, 2019, 6:00PM – 7:30PM; Dr. Jorge Alvarez High School, Cafeteria, 375 Adelaide Ave, Providence, RI 02907
- March 21, 2019, 6:00PM – 7:30PM; Nathanael Greene Middle School, Auditorium, 721 Chalkstone Ave, Providence, RI 02908
In November 2018, the City issued a Request for Qualifications (RFQ) through the Board of Contract and Supply (BCS) to solicit and identify qualified partners interested in entering into a lease with the City to manage and operate the Providence Water Supply System. The lease in no way considers the sale or unrestricted lease of the system to a private entity.
As part of the scope of project, respondents were asked to provide:
- Information related to asset management, operations, and finances.
- Perform routine, predictive, and preventive maintenance, repair and replacement in accordance with contract performance standards.
- Develop short and long-term Capital Improvement Plans (CIP)
- Manage, monitor, and balance financing to support the CIP and any other full-risk asset management responsibilities required by the Lease.
This RFQ provided prospective operators the opportunity to present their qualifications and their submissions are currently under review by the City of Providence.
This legislation would take effect upon passage. For more information and to review frequently asked questions visit the City of Providence’s website.
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